I have some basic questions about how to proceed to retile the hearth and surround in the photo. I will be removing the wood trim in the photo.

Hearth

The floor is a patching material over chipCrete. Pretty flat.
I want to have the porcelain tile flush with the hardwood flooring I will be installing, which will be 3/4" with the underlayment.
I'm thinking to use Ditra and thinset to build up the tile flush to the hardwood.
I'd like to use 2 pieces of 16 x 32 inch porcelain tile for the hearth, but I'm concerned that I may not get them level to each other.
Appreciate comments and recommendations on my plan.

Surround
As you can see from the photo the old surround was fixed to wall board with mastic. I'll be using 12 x 24 tiles for the surround.
Should I use mastic or thinset to install the files?
Replace the damaged wall board with regular drywall or something else like durock?

If I don’t use CBU can I use thin set over the wall board To install the 12 x 24 tile I’ll be using for the surround

Another ?
There is a metal flange above the fireplace. Not sure what the purpose of this was. The previous 8 x 8 tile was laid on top of it. I’m thinking I can just remove this and have the tile line of the surround start where the fireplace insert begins. I’ll need to paint the area where the flange was, as it looks pretty worn there.
Is There any reason that I need to keep this metal flange in place?

1.) I would use the ditra.
2.) I see alot of holes and damage to the wall, I wouldn't install on it in the way it is. Hard to tell what the metal is for, could be a heat shield or possibly a bracket? Like I said its too hard to tell from the pic.

Iím Definitely planning on replacing the damaged wall board. It just will be bigger project if I replace it all with CBU or just cut out the bad sections and replace with CBU OR Sheetrock. So if itís okay to leave the good sections of drywall Iíll go that way. (I gather from other posts itís okay, if not the best install)

I think the metal strip was installed as a flange for the original tile install so 8 x 8 tiles could be installed with no cuts.

Ed, a closer pic of the metal flange might help us determine what the flange is and if it should be removed.

Are you planning to remove the wood frame that goes across the top and down the sides? I know you have solid wood across the top to nail to but you will need studs to nail the new sheetrock to on the sides. I would locate those.

Questions
1. Is Ardex X a suitable thinset for this project? I'll use a 1/2 notched trowel
2. Install Hearth or surround first or does it matter?
3. Part of surround will cover a few inches of the top of the fireplace insert, similar to the tile surround that was there before. Any issues/advice on this? Can I apply thinset on the fireplace metal? I plan on using a temporary support board for this top layer of two tiles for alignment and to avoid slippage while the mortar sets.
4. Suggestions how to finish edges of tile on the surround both outside on the drywall and inside around the fireplace. What is simple and look nice? I plan to have hearth tile level with the hardwood I'll be installing and almost flush - 1/4 gap filled with matching caulk.